# in Re Mark P. Hardwick, Individually and D/B/A Mark P. Hardwick Oil & Gas Properties and Mark P. Hardwick, LLC

> Texas Court of Appeals, 1st District (Houston) · August 2, 2012 · 426 S.W.3d 151

URL: https://www.frixlaw.com/law-library/cases/3122280

## Case

- **Full name:** In Re Mark P. HARDWICK, Individually and D/B/A Mark P. Hardwick Oil & Gas Properties, and Mark P. Hardwick, LLC, Relators
- **Court:** Texas Court of Appeals, 1st District (Houston)
- **Decided:** August 2, 2012
- **Citations:** 426 S.W.3d 151; 179 Oil & Gas Rep. 535; 2012 Tex. App. LEXIS 6518; 2012 WL 3132670
- **Precedential status:** Published
- **Opinion:** Opinion by Massengale
- **Judges:** Bland, Massengale, Brown
- **Cited by:** 31 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3122280

## How later opinions describe it (automated extraction)

- concluding that mandatory venue applied in an action for 11 breach of contract and fiduciary duty where the remedy sought included forfeiture of mineral interests
- concluding that mandatory venue applied in an action for breach of contract and fiduciary duty where the remedy sought included forfeiture of mineral interests
- holding action seeking forfeiture of assigned mineral interests and overriding royalty interests as a remedy was suit to recover real property interests subject to § 15.011
- holding that trial court judgment that would have some effect on “an interest in real property” invokes section 15.011
- holding that the equitable remedy of forfeiture does not amount to a request for an injunction under section 65.023

## Opinion text

Opinion issued August 2, 2012

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-12-00362-CV
———————————
IN RE MARK P. HARDWICK, INDIVIDUALLY AND D/B/A MARK P.
HARDWICK OIL & GAS PROPERTIES, AND MARK P.
HARDWICK, LLC, Relators

Original Proceeding on Petition for Writ of Mandamus

OPINION

Relators Mark P. Hardwick, individually and doing business as Mark P.

Hardwick Oil & Gas Properties, and Mark P. Hardwick, LLC bring this petition for
writ of mandamus challenging the trial court’s denial of their motion to transfer

venue.1 We conditionally grant the petition for writ of mandamus.

Background

Real party in interest Smith Energy Company is in the business of

developing oil and gas reserves. In 2008, Smith Energy engaged Mark Hardwick,

who lives and works in Midland, Texas, to provide services as its landman in

several West Texas counties. Pursuant to that engagement, Hardwick performed

title searches, purchased oil and gas leases, and cured defects in title on Smith

Energy’s behalf.

In 2010, Smith Energy and Hardwick, along with other parties, entered into

three sets of agreements. Under each agreement, Hardwick was to obtain leases

and rights of access from landowners within certain geographic areas. Smith

Energy compensated Hardwick both in cash and by granting interests in the leases

that he acquired. Under the “On Point” Geophysical Exploration Agreement,

Hardwick was to receive a defined percentage of a working interest in leases

acquired in a 45-square mile area extending across Lynn, Terry, and Dawson

Counties. Under the “Muy Caliente” Geophysical Exploration Agreement, he was

to receive an equal share, along with three other parties, of a 25% undivided

1
The underlying case is Smith Energy Company v. Mark P. Hardwick,
individually and d/b/a Mark P. Hardwick Oil & Gas Properties, and Mark
P. Hardwick, LLC, No. 2011-68059 in the 55th District Court of Harris
County, Texas, the Honorable Jeff Shadwick, presiding.
2
working interest in leases developed in a 145-square mile area extending across

Lynn, Terry, Hockley, and Borden Counties, and he was to receive $12,500 for

each of the first nine wells drilled in the area. Under the “Bad Billy” letter

agreement, he was to receive a 1% overriding royalty interest, meaning he would

receive 1% of all proceeds from any well drilled in an 86,000-acre area extending

across Terry, Lynn, Yoakum, Hockley, and Lubbock Counties.

Over the course of their business relationship, Smith Energy paid Hardwick

his fees and his other expenses incurred in connection with his services. But in

August 2011, after a dispute over what expenses Smith Energy would reimburse,

Hardwick resigned as Smith Energy’s landman and refused to perform additional

services.

Smith Energy sued Hardwick and his company, Mark P. Hardwick, LLC, in

Harris County district court. Smith Energy alleged in its original petition that

Hardwick’s sudden resignation occurred before he completed his work, that he

compromised the obligations that Smith Energy owed to other investors, and that

his resignation forced the company to retain a substitute landman at additional cost.

Smith Energy also alleged that, following Hardwick’s resignation, it discovered

multiple billing irregularities, including double-billing the company and other

affiliates for work performed during the same time periods, billing for days when

Hardwick was on vacation, and billing other hours when Hardwick did not work.

3
Additionally, Smith Energy alleged that Hardwick “duped” the company’s

president into signing an amendment to the “On Point” Geophysical Exploration

Agreement by misrepresenting the amendment’s contents, and it further alleged

that he wrongfully refused to turn over proprietary title information belonging to

the company. Smith Energy alleged causes of action for breach of fiduciary duty,

breach of contract, fraud, and civil theft. In addition to requesting actual damages,

exemplary damages, and attorney’s fees, Smith Energy’s prayer for relief

requested “forfeiture of all compensation paid or granted to Defendants, including

all assigned mineral interests and overriding royalty interests.” These mineral and

royalty interests, as described above, were specifically identified in the background

section of the petition. In the original petition, Smith Energy also requested a

temporary restraining order and a temporary injunction to prevent Hardwick and

his company from destroying documents relating to the litigation.

Hardwick and Mark P. Hardwick, LLC responded with a combined general

denial and motion to transfer venue. In the motion to transfer venue, Hardwick

and his company construed Smith Energy’s petition as effectively seeking an

injunction due to its request for forfeiture of mineral and royalty interests, on the

reasoning that the requested forfeiture only could be accomplished by an injunction

ordering Hardwick and his company to assign and convey their interests to Smith

Energy. Therefore, according to Hardwick and his company, the suit was one for

4
“a writ of injunction,” making venue mandatory in the county of their domicile,

Midland County. See TEX. CIV. PRAC. & REM. CODE ANN. § 65.023(a) (West

2008). Alternatively, Hardwick and his company contended that venue was

mandatory in Terry County because Smith Energy’s suit sought “recovery of . . .

interest in real property,” and most of the land overlying those interests was

located in that county. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.011 (West

2002). In the further alternative, Hardwick and his company contended that venue

was mandatory in any of the other counties where the property interests at issue

were located: Lynn, Hockley, Dawson, Yoakum, Borden, and Lubbock Counties.

After Hardwick and Mark P. Hardwick, LLC filed their motion to transfer

venue but before the trial court ruled on the motion, Smith Energy filed its first

amended petition. The allegations and causes of action in the first amended

petition were substantially identical to those in the original petition; however,

Smith Energy eliminated its request for a temporary restraining order or for a

temporary injunction of any kind.

The trial court signed an order denying the motion to transfer venue. On the

face of the order appears the following handwritten notation: “Under the case law,

5
the Court looks to the ‘ultimate or dominant’ purpose of the suit which, here, is a

breach of contract (see cases cited at 28–29 of Plaintiff’s brief.).”2

After the trial court signed its order denying the motion to transfer venue,

Hardwick and Mark P. Hardwick, LLC filed a petition for writ of mandamus in

this court. Since this original proceeding began, Smith Energy has filed two more

amended petitions in the trial court, alleging that in the “Muy Caliente”

Geophysical Exploration Agreement, the parties had contractually agreed to venue

in Harris County.

Analysis

In their petition for writ of mandamus, Hardwick and Mark P.

Hardwick, LLC argue that the trial court erred by denying their motion to transfer

venue. They contend that because Smith Energy effectively seeks an injunction

when it prays for forfeiture of Hardwick’s mineral and royalty interests, venue is

mandatory under Section 65.023 of the Civil Practice and Remedies Code in the

defendants’ county of domicile, in this case, Midland County. Alternatively, they

2
The notation refers to one of Smith Energy’s filings entitled “Plaintiff’s
Opposition to Defendants’ Motion to Transfer Venue.” The cases cited on
pages 28 and 29 of that filing are: Karen Corp. v. Burlington N. & Santa Fe
Ry. Co., 107 S.W.3d 118 (Tex. App.—Fort Worth 2003, pet. denied);
Allison v. Fire Ins. Exch., 98 S.W.3d 227 (Tex. App.—Austin 2002, pet.
granted, judgm’t vacated w.r.m.); KJ Eastwood Invs., Inc. v. Enlow, 923
S.W.2d 255 (Tex. App.—Fort Worth 1996, orig. proceeding); Trafalgar
House Oil & Gas Inc. v. De Hinojosa, 773 S.W.2d 797 (Tex. App.—San
Antonio 1989, no writ); Scarth v. First Bank & Trust Co., 711 S.W.2d 140
(Tex. App.—Amarillo 1986, no writ).
6
argue that because Smith Energy seeks recovery of real property interests, venue is

mandatory under Section 15.011 of the Civil Practice and Remedies Code in one of

the counties where the land overlying the real property interests is located: Terry,

Lynn, Hockley, Dawson, Yoakum, Borden, or Lubbock County. Hardwick and his

company also dispute that venue is proper in Harris County on account of any

venue provision in the “Muy Caliente” Geophysical Exploration Agreement, and

they point out that Smith Energy did not plead that venue allegation before the trial

court made its venue ruling.

Smith Energy responds that its lawsuit does not seek injunctive relief, but

rather it primarily concerns a breach of contract claim seeking recovery of actual

and punitive damages. It argues that by seeking forfeiture of mineral and royalty

interests, which Hardwick acquired as contractual consideration, it is not seeking

true injunctive relief. Responding to Hardwick and his company’s argument that

Smith Energy seeks recovery of real property interests, Smith Energy argues that

the dominant and primary purpose of its suit is to determine whether Hardwick

breached contractual or fiduciary duties. Smith Energy maintains that the fact that

forfeiture of the mineral and royalty interests is a possible result does not make its

lawsuit one to recover real property. Smith Energy also argues that the venue

provision in the “Muy Caliente” Geophysical Exploration Agreement mandates

venue in Harris County. It contends that Hardwick and his company should have

7
challenged this basis for venue in the trial court, and it suggests that this court

could order the trial court to determine whether the contractual venue provision

controls.

I. Standard of review

Mandamus relief is an appropriate remedy to enforce a mandatory venue

provision when the trial court has denied a motion to transfer venue. In re Cont’l

Airlines, Inc., 988 S.W.2d 733, 735 (Tex. 1998) (orig. proceeding); see also TEX.

CIV. PRAC. & REM. CODE ANN. § 15.0642 (West 2002). “[T]he standard for

reviewing mandatory venue under Section 15.0642 is whether the trial court

abused its discretion.” Cont’l Airlines, 988 S.W.2d at 735. “[A] clear failure by

the trial court to analyze or apply the law correctly will constitute an abuse of

discretion . . . .” Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.

proceeding).

II. Effect of amended petitions filed after venue ruling

Rule 87 of the Texas Rules of Civil Procedure governs determinations on

motions to transfer venue. Part of that rule provides:

If venue has been sustained as against a motion to transfer . . . then no
further motions to transfer shall be considered regardless of whether
the movant was a party to the prior proceedings or was added as a
party subsequent to the venue proceedings, unless the motion to
transfer is based on the grounds that an impartial trial cannot be had
under Rules 257–259 or on the ground of mandatory venue, provided
that such claim was not available to the other movant or movants.

8
TEX. R. CIV. P. 87(5). Thus, unless one of the exceptions in Rule 87(5) applies,

only one venue determination may be made in a proceeding and changes in venue

after the initial venue ruling are prohibited. In re Team Rocket, L.P., 256 S.W.3d

257, 259 (Tex. 2008) (orig. proceeding). If the trial court initially denies a motion

to transfer venue, a subsequent motion to transfer venue resulting in a different

venue determination violates Rule 87(5), and the second determination is void.

Dorchester Master Ltd. P’ship v. Anthony, 734 S.W.2d 151, 152 (Tex. App.—

Houston [1st Dist.] 1987, orig. proceeding); accord In re Med. Carbon Research

Inst., L.L.C., No. 14-07-00935-CV, 2008 WL 220366, at *1 (Tex. App.—Houston

[14th Dist.] Jan. 29, 2008, orig. proceeding) (per curiam, mem. op.) (“[A] trial

court has the authority to make only one venue determination.”).

“The court shall determine the motion to transfer venue on the basis of the

pleadings, any stipulations made by and between the parties and such affidavits

and attachments as may be filed by the parties” in accordance with the applicable

rules. TEX. R. CIV. P. 87(3)(b). The trial court must base its venue determination

on the last pleading that was timely filed. See Nabors Loffland Drilling Co. v.

Martinez, 894 S.W.2d 70, 73 (Tex. App.—San Antonio 1995, writ denied)

(holding that plaintiffs were within their rights to amend petition prior to venue

hearing); Watson v. City of Odessa, 893 S.W.2d 197, 200 (Tex. App.—El Paso

1995, writ denied) (holding that amended petition filed seven days before venue

9
hearing was timely and trial court was “bound” to consider it); In re Fluor Enters.,

Inc., No. 13-11-00260-CV, 2011 WL 2463004, at *4 (Tex. App.—Corpus Christi

Jun. 13, 2011, orig. proceeding) (memo. op.) (holding that amended petitions filed

on the day of hearing were untimely pursuant to TEX. R. CIV. P. 63, and therefore

they “were not before the trial court for its consideration”); see also TEX. R. CIV.

P. 87(1) (providing that venue transfer movant must file any reply or additional

affidavits supporting motion at least seven days before hearing date, except on

leave of the court).

In this case, Smith Energy filed its original petition on November 9, 2011.

Hardwick and Mark P. Hardwick, LLC filed their motion to transfer venue on

December 5. Smith Energy then filed its first amended petition on December 21.

Although the record does not reflect the date when the hearing on the motion to

transfer venue was held, it does reflect that the trial court signed its order denying

the motion on March 19, 2012. The parties do not dispute the timeliness of Smith

Energy’s first amended petition.

The parties do dispute whether this court may consider Smith Energy’s

second and third amended petitions, which contain an additional venue allegation

that the parties had agreed in the “Muy Caliente” Geophysical Exploration

Agreement that venue should be in Harris County. See TEX. CIV. PRAC. & REM.

CODE ANN. § 15.020(b) (providing that parties to a “major transaction” may agree

10
to venue in particular county). These latter amended petitions were filed after the

trial court ruled on the motion to transfer venue, and accordingly the trial court

could not have considered them when it made its venue determination. The scope

of our review extends only to the trial court’s March 19, 2012 venue determination,

which is the ruling challenged in this original proceeding. See In re Applied Chem.

Magnesias Corp., 206 S.W.3d 114, 117 (Tex. 2006) (orig. proceeding); TEX. CIV.

PRAC. & REM. CODE ANN. § 15.0642. Accordingly, “we must focus on the record

that was before the trial court,” and we will not consider items that “were not part

of the trial court record at the time of the hearing on the motion that is the subject

of this original proceeding.” In re Taylor, 113 S.W.3d 385, 392 (Tex. App.—

Houston [1st Dist.] 2003, orig. proceeding).

We hold that Smith Energy was not entitled to maintain venue in Harris

County on the basis of venue allegations made in its second and third amended

petitions. Moreover, because the venue determination can be made only once, see

Team Rocket, 256 S.W.3d at 259, absent certain circumstances not present here,

see TEX. R. CIV. P. 87(5), we will not order the trial court to reconsider its

determination on the basis of the second and third amended petitions or any further

amended petitions that Smith Energy may file.

11
III. Mandatory venue for “writ of injunction” — TEX. CIV. PRAC. &
REM. CODE ANN. § 65.023(a)

The Civil Practice and Remedies Code specifies that “a writ of injunction

against a party who is a resident of this state shall be tried in a district or county

court in the county in which the party is domiciled.” TEX. CIV. PRAC. & REM.

CODE ANN. § 65.023(a). This mandatory venue provision “applies only to suits in

which the relief sought is purely or primarily injunctive.” Cont’l Airlines, 988

S.W.2d at 736. When the pleadings request an injunction that is “merely ancillary

to a judgment awarding recovery of lands,” Section 65.023(a) has no application.

Brown v. Gulf Television Co., 306 S.W.2d 706, 708 (Tex. 1957) (analyzing

predecessor statute). Thus, the mere possibility that a court will resort to its

injunctive powers to enforce a judgment does not by itself transform a suit into one

for a “writ of injunction” within the meaning of Section 65.023(a). Cont’l Airlines,

988 S.W.2d at 736–37.

Although the relevant petition in this case does not expressly seek injunctive

relief, Hardwick and Mark P. Hardwick, LLC argue that Smith Energy’s prayer for

“forfeiture of all compensation paid or granted . . . including all assigned mineral

interests and overriding royalty interests” necessarily seeks injunctive relief

because, if Smith Energy prevails, the court will order them to execute

conveyances of mineral and royalty interests. They contend that such an order

constitutes an injunction.
12
This proceeding thus presents the question of whether the forfeiture

requested in Smith Energy’s first amended petition is tantamount to a “writ of

injunction” within the meaning of Section 65.023(a). The term “writ of

injunction” is not defined by statute. In the absence of a statutory definition, we

apply statutory terms according to their ordinary meanings. See Monsanto Co. v.

Cornerstones Mun. Util. Dist., 865 S.W.2d 937, 939 (Tex. 1993). We presume

that the Legislature enacts statutes with knowledge of the common law and court

decisions. Phillips v. Beaber, 995 S.W.2d 655, 658 (Tex. 1999). Thus, in

determining the ordinary meaning of an undefined statutory term that has a

common-law meaning, we apply its common-law meaning. Sorokolit v. Rhodes,

889 S.W.2d 239, 241–42 (Tex. 1994).

“An injunction is a remedial writ that depends on the issuing court’s equity

jurisdiction.” Qwest Commc’ns Corp. v. AT&T Corp., 24 S.W.3d 334, 336 (Tex.

2000). Matters of form do not control whether an order is an injunction; rather, “it

is the character and function of an order that determine its classification.” Del

Valle Indep. Sch. Dist. v. Lopez, 845 S.W.2d 808, 809 (Tex. 1992). An injunction

may be either prohibitive, forbidding particular conduct, or mandatory, requiring

particular conduct. RP&R, Inc. v. Territo, 32 S.W.3d 396, 400 (Tex. App.—

Houston [14th Dist.] 2000, no pet.); Universal Health Servs. v. Thompson, 24

S.W.3d 570, 576 (Tex. App.—Austin 2000, no pet.); see also Qwest, 24 S.W.3d at

13
336 (observing that “[o]ne function of injunctive relief is to restrain motion and to

enforce inaction” and recognizing that an order commanding a company to

undertake certain actions was an injunction). To be entitled to a permanent

injunction, the plaintiff must plead and prove (1) a wrongful act, (2) imminent

harm, (3) irreparable injury, and (4) absence of an adequate remedy at law. See,

e.g., Indian Beach Prop. Owners Ass’n v. Linden, 222 S.W.3d 682, 690 (Tex.

App.—Houston [1st Dist.] 2007, no pet.).

Courts may fashion equitable remedies such as profit disgorgement and fee

forfeiture to remedy a breach of fiduciary duty. ERI Consulting Eng’rs, Inc. v.

Swinnea, 318 S.W.3d 867, 873 (Tex. 2010). The equitable remedy of forfeiture

must fit the circumstances presented. Burrow v. Arce, 997 S.W.2d 229, 241 (Tex.

1999). Multiple factors can be relevant to deciding whether the party who

breaches a fiduciary duty should forfeit his compensation and, if so, in what

amount. See id. (citing RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS

§ 49 (Proposed Final Draft No. 1, 1996) (listing factors relevant to forfeiture of

attorney’s fees)); see also id. at 243 (citing RESTATEMENT (SECOND) OF TRUSTS

§ 243 cmt. c (1959) (listing factors relevant to forfeiture of trustee’s

compensation)). Although the harm caused by the breach of fiduciary duty is one

relevant factor in the forfeiture analysis, see id. at 243, a party seeking forfeiture

14
does not need to prove actual damages in order to be entitled to the remedy, see id.

at 239–40 & nn.35–37.

Both injunction and forfeiture are equitable remedies to which the principles

of equity apply. See Burrow, 997 S.W.2d at 245 (noting that principles of equity

pertinent to constructive trusts also apply in forfeiture cases); State v. Tex. Pet

Foods, Inc., 591 S.W.2d 800, 804 (Tex. 1979) (observing that “injunctive relief is

proper when the trial court finds it justified under the rules of equity”); TEX. CIV.

PRAC. & REM. CODE ANN. § 65.011(3) (providing that a court may grant a writ of

injunction when the applicant is entitled “under the principles of equity”).

However, the remedies differ in their fundamental purposes. The purpose of an

injunction is to prevent ongoing or imminent injuries. See Whitaker v. Dillard, 16

S.W. 1084, 1085 (Tex. 1891) (observing that “the writ of injunction is used to

prevent injuries, and not to afford remedy for injury inflicted”); Wiese v. Heathlake

Cmty. Ass’n, Inc., No. 14-11-00268-CV, 2012 WL 1009531, at *3 (Tex. App.—

Houston [14th Dist.] Mar. 27, 2012, no pet.) (“Generally, the purpose of injunctive

relief is to halt wrongful acts that are either threatened or in the course of

accomplishment.”). By contrast, “the central purpose of the equitable remedy of

forfeiture is to protect relationships of trust by discouraging agents’ disloyalty.”

Burrow, 997 S.W.2d at 238.

15
Because they have different purposes, injunction and forfeiture have

different prerequisites. “A prerequisite for injunctive relief is the threat of

imminent harm.” Operation Rescue-Nat’l v. Planned Parenthood of Houston &

Se. Tex., Inc., 975 S.W.2d 546, 554 (Tex. 1998); see also Morris v. Collins, 881

S.W.2d 138, 140 (Tex. App.—Houston [1st Dist.] 1994, writ denied). But for

forfeiture, there is no prerequisite that harm, imminent or otherwise, be shown. As

the Supreme Court of Texas explained in Burrow v. Arce, 997 S.W.2d 229 (Tex.

1999), limiting forfeiture’s availability to instances in which the principal sustains

actual harm would conflict with the purposes of the remedy:

It is the agent’s disloyalty, not any resulting harm, that violates the
fiduciary relationship and thus impairs the basis for compensation.
An agent’s compensation is not only for specific results but also for
loyalty. Removing the disincentive of forfeiture except when harm
results would prompt an agent to attempt to calculate whether
particular conduct, though disloyal to the principal, might nevertheless
be harmless to the principal and profitable to the agent. The main
purpose of forfeiture is not to compensate an injured principal, even
though it may have that effect.

Burrow, 997 S.W.3d at 238. Thus, the plaintiff seeking forfeiture of compensation

for breach of fiduciary duty need not prove actual damages in order to be entitled

to that equitable remedy. Id. at 240.

Since the purposes of and prerequisites for injunction and forfeiture are

different, we conclude that the equitable remedy of forfeiture is not a variation or

type of “injunction” under the ordinary common-law meaning of that term.

16
Accordingly, a plaintiff who requests the equitable remedy of forfeiture, as Smith

Energy has, does not request a “writ of injunction” for the purpose of the

mandatory venue provision of Section 65.023(a). To the extent that the trial court

ultimately may resort to its injunctive powers to enforce a judgment of forfeiture

by ordering Hardwick or Mark P. Hardwick, LLC to convey real property interests

to Smith Energy, such an injunction would be ancillary to the suit and thus does

not implicate Section 65.023(a). See Cont’l Airlines, 988 S.W.2d at 736–37;

Brown, 306 S.W.2d at 708.

We hold that Smith Energy’s first amended petition does not seek purely or

primarily injunctive relief, and therefore the mandatory venue provision of

Section 65.023(a) does not require that the suit be transferred to Midland County,

where the relators are domiciled. Accordingly, the trial court did not err in

denying the motion to transfer venue pursuant to Section 65.023(a).

IV. Mandatory venue for “recovery of . . . interest in real property” —
TEX. CIV. PRAC. & REM. CODE ANN. § 15.011

A separate mandatory venue provision of the Civil Practice and Remdies

Code specifies:

LAND. Actions for recovery of real property or an estate or
interest in real property, for partition of real property, to remove
encumbrances from the title to real property, for recovery of damages
to real property, or to quiet title to real property shall be brought in the
county in which all or a part of the property is located.

17
TEX. CIV. PRAC. & REM. CODE ANN. § 15.011. This mandatory venue provision

applies if Smith Energy’s suit falls within one of the categories of actions

identified in the statute. Applied Chem., 206 S.W.3d at 117; Maranatha Temple,

Inc. v. Enter. Prods. Co., 833 S.W.2d 736, 739 (Tex. App.—Houston [1st Dist.]

1992, writ denied). The ultimate or dominant purpose of a suit determines whether

it is for one of the identified actions, not how the cause of action is described by

the parties. Bracewell v. Fair, 638 S.W.2d 612, 615 (Tex. App.—Houston [1st

Dist.] 1982, no writ) (analyzing predecessor statute); Airvantage, L.L.C. v. TBAN

Props. # 1, L.T.D., 269 S.W.3d 254, 258 (Tex. App.—Dallas 2008, no pet.); see

also In re Kerr, 293 S.W.3d 353 (Tex. App.—Beaumont 2009, orig. proceeding)

(“[M]andatory venue provisions may not be evaded merely by artful pleading.”).

The nature of the suit is determined from the facts alleged in the plaintiff’s

petition, the rights asserted, and the relief sought. Brown, 306 S.W.2d at 708;

Maranatha Temple 833 S.W.2d at 738 (citing Renwar Oil Corp. v. Lancaster, 276

S.W.2d 774, 775 (Tex. 1955)). Thus, once it is demonstrated that the court’s

judgment would have some effect on an interest in real property, the venue of the

suit is properly fixed under Section 15.011. Bracewell, 638 S.W.2d at 615;

Airvantage, 269 S.W.3d at 259. If Section 15.011 applies to one of the claims or

causes of action in the petition, then all claims and causes of action arising from

the same transaction must be brought in the county of mandatory venue. See TEX.

18
CIV. PRAC. & REM. CODE ANN. § 15.004 (West 2002); see also Atl. Richfield Co. v.

Trull, 559 S.W.2d 676, 681 (Tex. Civ. App.—Corpus Christi 1977, writ dism’d)

(observing that “[i]f two or more causes of action are joined, the first question is

whether at least one of the claims falls within” the mandatory venue provision and

“[t]here is no need . . . to compare the two causes of action to see which cause

contains the primary right sought”).

Our application of Section 15.011 is guided by two opinions of the Supreme

Court of Texas. In Yzaguirre v. KCS Resources, Inc., 53 S.W.3d 368 (Tex. 2001),

a gas producer that owned mineral leases in Zapata County sued the royalty owners

in a Dallas County district court. Yzaguirre, 53 S.W.3d at 370. The gas producer

sought a declaratory judgment that it was required to pay royalties based on market

value rather than a higher formula set out in a purchase agreement between the gas

producer and the distributor. Id. The royalty owners moved to transfer venue to

Zapata County under a prior, substantially similar version of Section 15.011,

contending that the nature and extent of their royalties concerned an interest in real

property. Id. at 371.3

3
At the time the Yzaguirre suit began, Section 15.011 provided:

19
The Court observed in Yzaguirre that “[a]lthough the oil and gas leases are

an interest in real property, the applicable version of section 15.011 applied only

when ownership of the property was in dispute.” Id. (citing Maranatha Temple,

833 S.W.2d at 738, and Scarth v. First Bank & Trust Co., 711 S.W.2d 140, 141–42

(Tex. App.—Amarillo 1986, no writ)). The Court noted that the ownership, extent,

boundaries, and percentages of the royalties were not in dispute. Id. It therefore

concluded that “[b]ecause the suit does not involve recovering real property or

quieting title,” the mandatory venue provisions of the former version of

Section 15.011 did not apply. Id.

In contrast to Yzaguirre, the mandatory venue provision was held to apply

under the circumstances presented in In re Applied Chemical Magnesias Corp.,

206 S.W.3d 114 (Tex. 2006) (orig. proceeding). In that case, a mining company

and a landowner executed a letter agreement granting the mining company an

option to purchase a mineral lease to excavate marble on land located in Culberson

County. Applied Chem., 206 S.W.3d at 115. When the mining company attempted

Actions for recovery of real property or an estate or interest in
real property, for partition of real property, to remove
encumbrances from the title to real property, or to quiet title to
real property shall be brought in the county in which all or a
part of the property is located.

Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1, 1985 Tex. Gen. Laws
3242, 3247.

20
to exercise its option, the landowner refused to deliver the mineral lease on the

basis that the mining company had not fully complied with the letter agreement.

Id. The landowner filed a declaratory judgment action in San Saba County, the

county of its principal place of business and the location where the letter agreement

was negotiated and executed. Id. at 116. The mining company, relying on

Section 15.011, moved to transfer venue to Culberson County. Id.

The Supreme Court of Texas in Applied Chemical construed the declaratory

judgment mechanism employed by the landowner “as an indirect means of quieting

title to the mineral estate.” Id. at 119. The Court concluded that the “essence of

this dispute” was whether the mining company had a right to mine marble on the

land. Id. If so, the Court reasoned, the mining company had a mineral lease

involving an interest in real property, thereby bringing the suit within

Section 15.011’s mandatory venue provision. Id.

We conclude that because Smith Energy has prayed for the equitable remedy

of forfeiture to obtain from Hardwick and Mark P. Hardwick, LLC certain

specified “mineral interests and overriding royalty interests,” this case is more

analogous to Applied Chemical than it is to Yzaguirre. In Yzaguirre, the rightful

ownership of the royalty interests was not in dispute. See Yzaguirre, 53 S.W.3d at

371. In Applied Chemical, by contrast, the Court noted that the essence of the

dispute was whether the mining company had a right to mine marble by virtue of

21
the option contained in the letter agreement. See Applied Chem., 206 S.W.3d at

119. Thus, the parties in that case disputed, through the exercise of a contractual

provision, whether one of them was entitled to an interest in real property. See id.

Similarly, in this case, the parties dispute whether equity requires the “forfeiture of

all compensation paid or granted to Defendants, including all assigned mineral

interests and overriding royalty interests.” If Smith Energy is successful in its suit,

it will recover ownership of mineral and royalty interests.4 Because this qualifies

as a suit to recover real property interests, Section 15.011 applies. See id.

Smith Energy contends that the dominant purpose of its suit is not to recover

an interest in real property, but rather it is “to decide whether Hardwick breached

his agreement to act as Smith Energy’s agent and his fiduciary duties by quitting

and overbilling Smith Energy.” Understood in their proper context, the authorities

relied upon by Smith Energy for the proposition that the “ultimate” or “dominant”

purpose of the suit determines its nature echo the principle that “[w]hether the

recovery is called conversion, breach of contract, or other non-real property types

4
In briefing to this court, Smith Energy argued that “whether the [trial court]
will order forfeiture of Relators’ overriding royalty interest is purely
discretionary with the court,” and that “the mere possibility that Hardwick
could be forced to forfeit his one percent interest . . . does not give rise to
mandatory venue under section 15.011.” This implies that Smith Energy in
fact seeks forfeiture of the mineral and royalty interests as one of several
remedies. During oral argument, Smith Energy expressly confirmed that, as
one of its possible remedies, it is requesting an award of the ownership of
the mineral and royalty interests at issue.

22
of recovery, the true nature of the lawsuit depends on the facts alleged in the

petition, the rights asserted, and the relief sought.” Airvantage, 269 S.W.3d at

258.5 For instance, in Applied Chemical, the plaintiff purported to file a

declaratory judgment action to “clarify the rights and remedies of the parties under

the letter agreement.” Applied Chem., 206 S.W.3d at 116. In that sense, the

Applied Chemical dispute could be understood as having a dominant purpose of

resolving a contractual dispute. The Court, however, looked beyond the

“declaratory judgment mechanism” to discover what was, in substance, a suit to

establish rightful ownership in real property. See id. at 119.6 Similarly, although

5
See, e.g., Bracewell v. Fair, 638 S.W.2d 612, 615 (Tex. App.—Houston [1st
Dist.] 1982, no writ) (“It is the ultimate or dominant purpose of a suit that
determines whether a particular suit falls under [Section 15.011’s
predecessor], and not how the cause of action is described by the parties.”);
Airvantage, L.L.C. v. TBAN Props. # 1, L.T.D., 269 S.W.3d 254, 258 (Tex.
App.—Dallas 2008, no pet.) (“[N]o special distinctions are made for real
property suits simply because they are couched in terms of a declaratory
judgment. . . . The ultimate or dominant purpose of a suit determines
whether it falls under the mandatory venue statute.”).
6
See also In re Kerr, 293 S.W.3d 353, 358 (Tex. App.—Beaumont 2009,
orig. proceeding) (in suit for breach of fiduciary duty and fraud, “Plaintiff’s
original pleading claimed entitlement to land in Harris County, sought its
recovery in addition to profits and damages, and so was subject to
section 15.011”); McCasland v. Bennett, 597 S.W.2d 46, 47–48 (Tex. Civ.
App.—Waco 1980, no writ) (in breach of fiduciary duty suit seeking to
impress constructive trust on property held in trust by trustee, suit was for
the recovery of land); Atl. Richfield Co. v. Trull, 559 S.W.2d 676, 681 (Tex.
Civ. App.—Corpus Christi 1977, writ dism’d) (in suit for forfeiture of oil
and gas lease for failure to reasonably develop, “the principal right and relief
sought . . . is to recover certain lands”); Norvell v. Stovall, 95 S.W.2d 1313,
23
Smith Energy’s claims are premised upon allegations of breaches of contractual

and fiduciary duties, through the mechanism of this lawsuit, Smith Energy in

substance seeks, as part of its remedy, the recovery of real property interests.

Because a judgment that awarded such relief would have some effect on an interest

in real property, venue is properly fixed under Section 15.011. Bracewell, 638

S.W.2d at 615.

1315 (Tex. Civ. App.—Beaumont 1936, no writ) (in suit to cancel deed
procured by fraud, “plaintiff’s case . . . is not merely an action for fraud”
rather “[t]he real purpose of the suit is the recovery of title to the land”);
Liles v. McDonald, 63 S.W.2d 886, 886 (Tex. Civ. App.—Waco 1933, no
writ) (in suit to cancel royalty deed procured by fraud, “the purpose of the
action was to cancel the mineral deed and to remove cloud from the title to
land”).

24
Conclusion

We hold that the trial court erred by failing to transfer venue pursuant to

Section 15.011. Accordingly, we conditionally grant Hardwick and Mark P.

Hardwick, LLC’s petition for writ of mandamus. We direct the district court to

vacate its March 19, 2012 order denying the relators’ motion to transfer venue, and

we further direct it to grant the motion. Before granting the motion, the trial court

may permit the parties to present additional evidence and arguments to help it

determine to which county it should transfer venue. We are confident the district

court will comply with our order, and our writ will issue only if it does not.

Michael Massengale
Justice

Panel consists of Justices Bland, Massengale, and Brown.

25

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3122280. Public record. Not legal advice.